Is Yatharth the next breakout in healthcare?

$5 billion—that's how much private equity firms invested in the Indian hospital industry in 2023 alone. This includes marquee names like Advent, KKR, Temasek and more. While hospitals may appear dull on paper, the return potential is anything but. Tier-2 and tier-3 towns remain underserved, while tier-1 cities are witnessing rising patient volumes, creating a solid long-term growth runway. That perhaps explains the steep industry median P/E ratio of around 60 times. But amidst this high-valuation crowd, one player stands out, trading at a significantly lower multiple of 37 times. While not dirt cheap, what drew our attention was the nature and intent behind its recent investments. Two-pronged growth Yatharth Hospital & Trauma Care Services has been quietly expanding its presence in the Delhi NCR region—arguably North India’s most lucrative healthcare market. While peers like Apollo, Max, Medanta, and Fortis have long dominated the premium end of the market, Yatharth is now carving its own path. Beyond valuation—on which we will elaborate shortly—Yatharth’s future growth hinges on two core levers: capacity expansion and margin improvement. The capex route Yatharth currently operates 1,605 beds, with an FY25 occupancy rate of 61 per cent, a significant portion of which is located in Delhi NCR. The company plans to add approximately 700 more beds over the next year, taking the total to around 2,300 by FY26—and eventually scaling up to 3,000 beds by FY28. This build-out has led to subdued earnings, as depreciation expenses have surged even before revenue growth kicks in—a familiar pattern in capital-intensive industries. Apollo Hospitals, India’s largest private hospital chain, went through a similar pha

This article was originally published on June 21, 2025.